Five large-cap pharmaceutical and biotech companies (Johnson & Johnson, Roche, Eli Lilly, Biogen and Sanofi) have recently reported their first-quarter earnings with seven others set to follow this week. We take a closer look at how the COVID-19 pandemic is impacting performance.
For each of those companies that have already reported Q1 sales, top-line pharma revenues have been incrementally boosted to some extent by a COVID-19 tailwind.
This trend has been primarily driven by buying patterns in the US and European markets to ensure access to medicines in the face of country- or state-wide lockdowns and is most prevalent with regard to oral medications for chronic conditions, analysts note. Sales of some medications, such as Roche's IL-6 inhibitor Actemra, have been boosted by potential use as treatments for COVID-19.
However, reflecting a decline in patients seeking non-COVID-19 care, any temporary boost in sales is likely to disappear in the second quarter. Johnson & Johnson, by virtue of its medical devices business, saw its performance disrupted more in the first quarter thanks to a marked decline in elective medical procedures.
Commenting on the performance of specific products since March, some companies cited high profile brands that are likely to experience a deceleration in sales growth as a result of the pandemic, with Roche, for example, suggesting that its multiple sclerosis treatment Ocrevus and its ophthalmology treatment Lucentis will likely be adversely impacted as patients delay hospital appointments.
Eli Lilly echoed this sentiment by noting that a reduction in hospital visits has driven a shift in preference towards drugs that can be taken at home. Companies also conceded that the number of patients initiating new treatments has slowed as a result of a decline in patient load, which has not been fully offset by an increase in telemedicine use.
Therapies with immunosuppressive mechanisms are at risk of greater impact, explaining Roche's caution towards near-term use of Ocrevus, which works by depleting B-cells. Roche is confident the drug does not put patients at higher risk from COVID-19 and is collecting data to support this view, but Sanofi and Biogen both noted that sales of their oral MS therapies, Aubagio and Tecfidera, respectively, have increased.
As expected, there has been less disruption to the use of oncology treatments as a result of the COVID-19 pandemic, a number of companies said, with Roche suggesting greater interest in treatments that can be administered by subcutaneous injection instead of intravenously in a healthcare setting. Roche and Sanofi also noted continued strong uptake for their key growth driver products Hemlibra (in haemophilia A) and Dupixent (in atopic dermatitis and asthma), respectively.
Eli Lilly said it had seen strong growth from its psoriasis treatment Taltz and analysts expect specialty brands in the dermatology, rheumatology and inflammatory bowel disease markets to be relatively insulated, partly as they are dispensed through specialty pharmacies and require less frequent physician visits.
There appears to have been little or no delays in regulatory interactions resulting from COVID-19, which helped to send Biogen shares down when the company confirmed its experimental Alzheimer's disease treatment aducanumab will not be filed with the FDA until the third quarter having previously inferred it would be submitted in early 2020. Instead, investors are concerned that Biogen's bullish outlook for aducanumab has been misplaced; the FDA may require more data from a recently initiated study, which would delay any approval until 2022 at the earliest and this trial may now also be disrupted by the impact of COVID-19.
Fully enrolled, late-stage clinical studies remain on track to read out largely as scheduled with delays and pauses to newer trials somewhat inconsistent. Roche said that oncology trials are likely to be impacted less and Johnson & Johnson said it is seeking to change sites to less affected places. Analysts have suggested that studies for drugs designed to treat chronic immunological conditions are likely to be most disrupted.
Big Pharma is continuing to prepare for new drug launches later in 2020 and has largely played down any protracted disruption to business, dismissing projected increase in US Medicaid and uninsured patients triggered by rising unemployment rates as speculative at this juncture.
Johnson & Johnson saw the biggest negative impact from COVID-19 in Q1, directed against its medical devices business, but said it was confident that infections would peak in mid-April and there would not be a more intense second wave later in the year.
Roche, Eli Lilly and Biogen conceded that headwinds can be expected throughout 2020 and Sanofi anticipates any favourable Q1 impact to be largely offset in the second quarter by a single-digit decline in revenues.
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